AIG finds buyer for consumer finance unit

Continuing its asset divestment
strategy, American International Group (AIG) is to sell 80% of its
consumer credit unit American General Finance (AGF) to US
investment management company Fortress Investment Group for an
undisclosed sum. AIG will retain a 20% in AGF.

Founded in 1920, AGF provides
loans, retail financing and other credit related products to more
than a million families in the US, Puerto Rico, the Virgin Islands,
and the UK through 1,100 branches.

“AGF is an exceptional franchise
with a strong management team and a leading platform for serving
the financing needs of consumers,” said Fortress chairman Wesley
Edens.

AGF has assets of $20bn and
liabilities of $18bn, including $17bn of debt. According to rating
agency Fitch, AGF’s debt represents 7 percentage points of AIG’ 57%
consolidated debt-to-capital ratio.

This ratio includes the impact of
AIG’s expected $1.9bn pre-tax loss on the sale, noted Fitch.

Fortress had assets under
management of $41.7bn at the end of June.

Sign up for our daily news round-up!

Give your business an edge with our leading industry insights.

Sign up